Bidding adieu to your current employer is never an easy process. A major challenge that you might find yourself facing may not be letting go of work colleagues or the experiences at the workplace, but the severance agreement…
A well-drafted severance agreement can provide financial security and clarity on post-employment benefits, but understanding its nuances is essential. On one hand, an agreement might be drafted in your best interests. On the other hand, and also more commonly, an agreement only serves to help the employer. How? Read on to learn more.
Severance Pay
Severance pay is the cornerstone of any severance agreement, providing financial support to employees after termination. It typically involves a lump sum or periodic payments based on factors such as length of service, job position, and company policies. A good severance agreement should clearly outline the amount and payment schedule.
Continuing Benefits
Continuing benefits, such as health insurance, are critical for employees transitioning out of their jobs. A comprehensive severance agreement should specify the duration and type of benefits that will continue post-termination. For instance, the agreement might include COBRA coverage, which allows employees to maintain their health insurance for a limited period.
Accrued Benefits
Accrued benefits refer to any earned but unused benefits, such as vacation days, sick leave, or bonuses. A severance agreement should account for these benefits, detailing how they will be compensated. This aspect can often be overlooked or undervalued, making it essential to have an attorney scrutinize the terms.
Outplacement
Outplacement services are designed to assist terminated employees in finding new employment. These services may include career counselling, resume workshops, and job placement assistance. A well-rounded severance agreement may offer outplacement services as part of the package.
Legal Liability
A severance agreement often includes clauses related to legal liability, such as waivers or releases of claims against the employer. These clauses can significantly impact your ability to pursue legal action for wrongful termination or other employment-related issues.
Non-Compete Clauses
Non-compete clauses restrict an employee’s ability to work for competitors or start a similar business within a specified time frame and geographic area. These clauses can limit your future employment opportunities.
These clauses are quite robust in their coverage, and employers will never hesitate in enforcing them. Remember, if you feel that a clause in the severance agreement is not written to benefit you, it’s probably true. In this case, it’s important to involve attorneys specializing in employment law to dissect your contract, and argue for one that works in your favor!
